facilities layout

Facilities Layout

Facilities Layout

Layout: the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system

• Product layouts

• Process layouts

• Fixed-Position layout

Objective of Layout Design

Facilitate attainment of product or service quality

Use workers and space efficiently

Minimize unnecessary material handling costs

Eliminate unnecessary movement of workers or materials

Minimize production time or customer service time

Design for safety

Importance of Layout Decisions

Requires substantial investments of money and effort

Involves long-term commitments

Has significant impact on cost and efficiency of short-term operations

The Need for Layout Decisions

Inefficient operations

Changes in the designof products or services

The introduction of newproducts or services

Accidents

Safety hazards

The Need for Layout Design (Cont’d)

6-6

Changes inenvironmentalor other legalrequirements

Changes in volume ofoutput or mix of

products

Changes in methodsand equipment

Morale problems

Basic Layout Types

Product layouts

Process layouts

Fixed-Position layout

Basic Layout Types

Product layout Layout that uses standardized processing

operations to achieve smooth, rapid, high-volume flow

Process layoutLayout that can handle varied processing

requirementsFixed Position layout

Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed

Product Layout

Raw materialsor customer

Finished item

Station 2

Station 2

Station 3

Station 3

Station 4

Station 4

Material and/or labor

Station 1

Material and/or labor

Material and/or labor

Material and/or labor

Used for Repetitive Processing

Product Layout

Work Station 1

Work Station 2

Work Station 3

Product Layout(sequential)

Used for Repetitive Processing

Advantages of Product Layout

High rate of outputLow unit costLabor specializationLow material handling costHigh utilization of labor and equipmentEstablished routing and scheduling

Disadvantages of Product Layout

Creates dull, repetitive jobsPoorly skilled workers may not maintain

equipment or quality of outputFairly inflexible to changes in volumeHighly susceptible to shutdownsNeeds preventive maintenanceIndividual incentive plans are impractical

A U-Shaped Production Line

1 2 3 4

5

6

78910

In

Out

Workers

Process Layout

Dept. A

Dept. B Dept. D

Dept. C

Dept. F

Dept. E

Advantages of Process Layouts

Can handle a variety of processing requirements

Not particularly vulnerable to equipment failures

Equipment used is less costlyPossible to use individual incentive plans

Disadvantages of Process Layouts

In-process inventory costs can be highChallenging routing and schedulingEquipment utilization rates are lowComplexities often reduce span of

supervisionSpecial attention for each product or customer

Fixed Position Layouts

Fixed Position Layout: Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed.

Nature of the product dictates this type of layout Weight Size Bulk

Large construction projects

Functional vs. Cellular Layouts

Dimension Functional Cellular

Number of moves between departments

many few

Travel distances longer shorter

Travel paths variable fixed

Job waiting times greater shorter

Throughput time higher lower

Amount of work in process

higher lower

Supervision difficulty higher lower

Scheduling complexity higher lower

Equipment utilization lower higher

Design Product Layouts: Line Balancing

Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.

Cycle Time

Cycle time is the maximum time allowed at each workstation tocomplete its set of tasks on a unit.

Determine Maximum Output

D

OT = timecycle = CT

rateoutput Desired= D

dayper timeoperating OT

CT

OT = rateOutput

D

OT = timecycle = CT

rateoutput Desired= D

dayper timeoperating OT

CT

OT = rateOutput

Determine the Minimum Number of Workstations Required

task timeof sum = t

CT

t)( =N

Precedence Diagram

Precedence diagram: Tool used in line balancing to display elemental tasks and sequence requirements

A Simple Precedence Diagrama b

c d e

0.1 min.

0.7 min.

1.0 min.

0.5 min. 0.2 min.

Calculate Percent Idle Time

Percent idle time = Idle time per cycle

(N)(CT)

Efficiency = 1 – Percent idle time

Using information contained in each of the following, do each of the following:

1.Draw a precedence dia.

2.Assuming an 8 hour workday. Compute the cycle time needed to obtain an output of 400 units per day

3.Determine the minimum number of workstations required

Task Immediate follower

Task time in Minutes

A B .2

B E .2

C D .8

D F .6

E F .3

F G 1

G H .4

H end .3

Precedence Diagram

c d

a c e

f g h

0.2 0.2 0.3

0.8 0.6

1.0 0.4 0.3

e

e

a c e g h i

b d f

. 3 min . 4 min . 2 min . 1 min . 5 min . 3 min

. 6 min 1.2 min .6 min

Station 1 Station 2 Station 3 Station 4

a b ef

d

g h

c

Parallel Workstations

Parallel Workstations are used to achieve a smooth flow of production. These are beneficial for bottleneck operations which would otherwise disrupt the flow of product as it moves down the line.

The bottleneck may be the result of parallel or very long tasks. Parallel workstations increases the work flow and provide flexibility

Bottleneck Workstation

1 min.2 min.1 min.1 min. 30/hr. 30/hr. 30/hr. 30/hr.

Bottleneck

Parallel Workstations

1 min.

2 min.

1 min.1 min. 60/hr.

30/hr. 30/hr.

60/hr.

2 min.

30/hr.30/hr.

Parallel Workstations

Cases

Case Study 1: ‘Professor’ Lalu scripts Indian Railway’s Turnaround

Case Study 2: Honda’s Mixed Model Assembly Lines

Johnson’s Rule

A technique for minimizing completion time for a group of jobs to be processed on two machines

Johnson’s Rule Conditions• Job time must be known and constant

• Jobs must follow same two-step sequence

• All units must be completed at the first work center before moving to second

Johnson’s Rule Optimum Sequence

1.List the jobs and their times at each work center

2.Select the job with the shortest time

3.Eliminate the job from further consideration

4.Repeat steps 2 and 3 until all jobs have been scheduled

Example

Time on machine A

Time on machine B

Job 1 10 2

Job 2 5 7

Job 3 4 10

Job 4 12 8

Job 5 9 6

Problems

1. The time required to complete each of the 8 jobs in a 2 machine flow shop are shown in the table that follows on the next slide. Each job must follow the same sequence. Beginning with machine A and moving to machine B.

A.Determine a sequence that will minimize a Makespan time

B.Construct a chart of resulting sequence and find machine B’s idle time

Job Machine A Machine B

A 16 5

B 3 13

C 9 6

D 8 7

E 2 14

F 12 4

G 18 14

H 20 11

Time in Hours

2. Precision machining provides custom machining for its customers. The company presently uses a first come first served sequencing rule for customer jobs. Because the company wants to finish customer jobs faster, it is considering 2 other rules

: shortest processing time and critical ratio. The company thinks that these criteria are important in selecting a sequencing rule: average flow time, average number of jobs in the system, and average job lateness. Study precision’s situation and recommend a sequencing rule.

Pl see the Table on next page

Job Sequence Production time(hrs)

Time to promised delivery ( hrs)

A 2 4

B 5 18

C 3 8

D 4 4

E 6 20

f 4 24

Case

6-46

a. Draw a precedence diagramb. Assuming that 55 minutes per hour are productive, compute

the cycle time required to obtain 50 units per hourc. Determine the minimum number of workstationsd. Assign tasks to workstationse. Find idle time and percent efficiency

4. Determine the placement of departments for a newly designed facility that will minimize total transportation costs using data in the following tables. Assume that reverse distances are the same. The locations are shown in the grid. Use a cost of $1 trip yard

Location A Location B Location C

Location D

4 contd….Distance between

location yards

To A B C D

From

A - 40 80 70

B - 40 50

C - 60

D -

Number of trips per dayBetween departments

To 1 2 3 4

From

1 - 10 20 80

2 - 40 90

3 - 55

4 -

5

Five departments are to be assigned to locations B-F in the grid (For technical reasons deptt. 6 must be assigned to location A). Transportation costs is $2 per foot. The objective is to minimize total transportation cost. Information on interdepartmental work flows and distances between locations is shown in the following tables. Assign departments with the greatest interdepartmental work flow first.

See related tables in the next slides

From To A B C D E F

A - 50 100 50 80 130

B - 50 90 40 70

C - 140 60 50

D - 50 120

E - 50

F -

Distance between locations (feet)

From To 1 2 3 4 5 6

1 - 125 62 64 25 50

2 - 10 17 26 54

3 - 2 0 20

4 - 13 2

5 - 5

6 -

Number of trips per day between centers

ADept 6 B

D

C

E F

MRP and ERP Problems

How does the purpose of ERP differ from MRP - II

If seasonal variations are present, is their incorporation into MRP fairly simple or fairly difficult. Explain briefly

What is the difference between planned order receipts and scheduled receipts

Briefly describe MRP-II and closed loop MRP

What is the major limitation of MRP

What are the major requirements for an effective MRP

How is safety stock included in MRP

Problem

E

M (3) I (2)

N (4) VR (2) P

Given the following production schedule in units and the production standards for labor and machine time for this product, determine the labor and machine capacity requirements for each week. Then compute the percent utilization of labor and machines in each week if labor capacity is 200 hours per week and machine capacity is 250 hours per week.

Production Schedule:Week 1 2 3 4 .Quantity 200 300 100 150  Standard Times .Labor .5 hour/unitMachine 1.0 hour/unit

Problem

Develop a Material Requirements plan for component H. Lead times for the end item and each component except B are 1 week. The LT for B is 3 weeks. Sixty units of A are required at the start of week 8. There are currently 15 units of B on hand and 130 units of E on hand, and 50 units of H are in production and will be completed by the start of week 2.

Z

A C (4) B (2)

D (2) E E (2) F D (3) G (2)

D

Problem

Balance system: Distributing the workload evenly among work stations

Work assigned to each work station must be less than or equal to the cycle time

Cycle time is set equal to the takt time

Takt time is the cycle time needed to match customer demand for final product

Using Closeness Ratings to Develop Service Facility Layouts

Typical Closeness Ratings

Closeness Meaning

Rating of Rating

1 Necessary 2 Very

Important 3 Important 4 Slightly

Important 5 Unimportant 6 Undesirable

Example: AG Advertising

Using Closeness Ratings

AG Advertising is moving into a new office suite having seven large, roughly equal size rooms, one for each department of the firm. Lisa, the manager, must now assign each department to a room. She has developed a grid of closeness ratings (on the next slide) for the 21 unique pairs of departments.

, one for each department of the firm. Lisa, the manager, must now assign each department to a room. She has developed a grid of closeness ratings (on the next slide) for the 21 unique pairs of departments.

Example: AG Advertising

55

66

44

44

22

3333

55

44

11

2266

2244

3333

116655

1122

A

B

C

D

E

F

G

Example: AG Advertising

Unassigned Rooms of Office Suite

• Layout Satisfying All Pairings of Departments with 1 Closeness Ratings

CR = 1 B – D B – F C – G

Example: AG Advertising

BB DD

FF CC GG

CR = 1

B-DB-FC-G

Trying to satisfying all pairings of departments with 6 closeness ratings, we see that Dept. C needs to be moved

BB DD

FF GG CC

CR = 1

B-DB-FC-G

CR = 6

A-DB-CB-G

Layout Satisfying All Pairings of Departments with 6 Closeness Ratings (note that we swapped Dept. D and Dept. F)

BB FF AA

DD EE GG CC

CR = 1

B-DB-FC-G

CR = 6

A-DB-CB-G

Procedure for setting Takt time

Takt time is often set for a work shift. The procedure for obtaining the takt time is:

1. Determine the net time available per shift by subtracting any non productive time from total shift time

2. If there is more than one shift per day, multiply the net time per shift by the number of shifts to obtain the net available time per day

3. Compute takt time by dividing the net available time by demand

Given the following information, compute the takt time: Total time per shift is 480 minutes per day, and there are 2 shifts per day. There are 40 minutes rest breaks and a 30 minutes lunch break per shift.

Daily demand is 80 units.

Problem

1. Compute net available time per shift:

Total time 480 minutes

Rest breaks -40 minutes

Lunch -30 minutes

= 410 minutes per shift

2. Compute the net available per day

410 minutes per shift * 2 shifts / day

= 820 minutes per day

3. Compute the takt time = Net time available per day / daily demand =

820 min per day / 80 units per day = 10.25 minutes per cycle

Usage at each work center is 300 parts per day, and a standard container holds 25 parts. It takes an average of .12 day for a container to complete a circuit from the time a Kanban card is received until the container is returned empty. Compute the number of Kanban cards required if X = .20

N = ?

D = 300 parts per day

T = .12 day

C = 25 parts per container

X = .20

N = 300 (.12)(1+.20) / 25 = 1.728 = 2

Determine the number of containers needed for a work station that uses 100 parts per hour if the time for a container to complete a cycle (move, wait, energy, wait, return) is equal to 90 minutes and a standard container holds 84 parts. An inefficiency factor of .10 is currently being used

Housekeeping

Maintaining a workplace that is clean and free of unnecessary materials.

What are 5 important S

Sort

Straighten

Sweep

Standardize

Self – Discipline

Autonomation and Jidoka

Capacity Planning

Capacity is the upper limit or ceiling on the load that an operating unit can handle.

Capacity also includes Equipment Space Employee skills

The basic questions in capacity handling are: What kind of capacity is needed? How much is needed When it is needed

Importance of Capacity Decisions

Impacts ability to meet future demandsAffects operating costsMajor determinant of initial costs Involves long-term commitmentAffects competitivenessAffects ease of managementGlobalization adds complexity Impacts long range planning

Capacity

Design capacitymaximum output rate or service capacity anoperation, process, or facility is designed for

Effective capacityDesign capacity minus allowances such aspersonal time, maintenance, and scrap

Actual outputrate of output actually achieved--cannotexceed effective capacity

Efficiency and Utilization

Determinants of Effective Capacity

FacilitiesProducts and Service FactorsProcess FactorsHuman FactorsPolicy FactorsOperational FactorsSupply Chain FactorsExternal Factors

Strategy Formulation

Capacity strategy for long-term demand Demand patterns Growth rate and variability Facilities Cost of building and operating Technological changes Rate and direction of technology changes Behavior of competitors Availability of capital and other inputs

Key Decisions of Capacity Planning

1. Amount of capacity needed Capacity cushion (100% - Utilization)

2. Timing of changes

3. Need to maintain balance

4. Extent of flexibility of facilities

Steps for Capacity Planning

1.Estimate future capacity requirements

2.Evaluate existing capacity

3. Identify alternatives

4. Conduct financial analysis

5.Assess key qualitative issues

6.Select one alternative

7. Implement alternative chosen

8.Monitor results

Forecasting Capacity Requirements

Long-term vs. short-term capacity needsLong-term relates to overall level of capacity such

as facility size, trends, and cyclesShort-term relates to variations from seasonal,

random, and irregular fluctuations in demand

Calculating ProcessingRequirements

If annual capacity is 2000 hours, then we need three machines to handle the required volume: 5,800 hours/2,000 hours = 2.90 machines

Planning Service Capacity

Need to be near customersCapacity and location are closely tied

Inability to store services Capacity must be matched with timing of demand

Degree of volatility of demandPeak demand periods

Developing Capacity Alternatives

1.Design flexibility into systems

2.Take stage of life cycle into account

3.Take a “big picture” approach to capacity

changes

4.Prepare to deal with capacity “chunks”

5.Attempt to smooth out capacity requirements

6.Identify the optimal operating level

Bottleneck Operation

Bottleneck Operation

Economies of Scale

Economies of scale•If the output rate is less than the optimal level, increasing output rate results in decreasing average unit costs

Diseconomies of scale• If the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs

Optimal Rate of Output

Evaluating Alternatives

Cost-volume analysisBreak-even point

Financial analysisCash FlowPresent Value

Decision theory

Waiting-line analysis

Cost Volume analysis

TC = FC + VC

VC = Q *v (Variable cost p.u.)

TR = R*Q

P = TR – TC= R*Q – (FC + v *Q)

Re arranging terms, we have

P = Q (R – v) – FC

R-v = Difference between revenue per unit and the contribution Margin

Q = (P + FC) / (R-v), QBEP = FC / (R-v)

Assumptions of Cost Volume Analysis

1. One product is involved

2.Everything produced can be sold

3.Variable cost per unit is the same regardless of volume

4.Fixed costs do not change with volume

5.Revenue per unit constant with volume

6.Revenue per unit exceeds variable cost per unit

Financial Analysis

Cash Flow - the difference between cash received from sales and other sources, and cash outflow for labor, material, overhead, and taxes.

Present Value - the sum, in current value, of all future cash flows of an investment proposal.

Decision TheoryHelpful tool for financial comparison of alternatives under conditions of risk or uncertainty

Suited to capacity decisions

Waiting Line Analysis

Useful for designing or modifying service systems

Waiting-lines occur across a wide variety of service systems

Waiting-lines are caused by bottlenecks in the process

Helps managers plan capacity level that will be cost-effective by balancing the cost of having customers wait in line with the cost of additional capacity